A survey says that 1 out of 10 workers in UK are ready to take a pay cut to keep their job as a survival action. Well! These are hard facts and threatening figures. As employers grapple with stemming layoff, a pay cut is the only viable option. Of course, there are many factors to mull over when deciding whether or not to take a pay cut as each employee will have a unique set of circumstances to consider. And whether an employee would take the offer depends on his/her needs, both in terms of career and personal finances. But there are no black and white formulae involved just universal concerns. With its debatable nature, it has its good and bad points.
Pros and cons:
- You still have a job in your hand: Having a job any day is better than being unemployed. Your market value depreciates but not to the extent of being unemployed. Also, you can manage your finances and pay your bills, albeit with difficulty. You’re gainfully employed if you happen to like the work. So, don’t decide in haste with money as the basis of criterion. No matter what industry you’re in, this security should make you happy.
- You have earnings to fall back on: Joblessness is frustrating and avoiding this unpleasant situation the most common reaction. After all, a job gives some security, and suddenly, the once terrible job may seem desirable. Though difficult, one can manage as some income is better than no income. Start looking out and prepare your resume. Remember, these days, hanging on to a job, even with a pay cut is preferable to walking away, as employers prefer hiring someone who’s employed to an unemployed person. Perform well despite your lower pay, and you’ll build a case that supports you.
- You do a favour to the company: By taking a salary cut, you’re showing your loyalty and commitment to the company and also doing a favour to your supervisors, especially if you’re proficient. And this might pay off once the economy recovers from the jolt.
- Your financial needs get jeopardised: This is the biggest concern as wage reduction influences your ability to provide for yourself and others. You’ve to review your budget carefully before accepting a salary cut. Check out the severance package and if the new remuneration fails to meet your requirements, take a call. But it’s best to take it as a temporary situation and lookout.
- Your professional graph takes a beating: An important consideration, as it affects your long-term career plans. A pay reduction is technically a demotion, which might jeopardize your professional worth. But with many feeling the crunch, it shouldn’t be difficult to explain this momentary setback. In fact, they might accept it as your loyal nature.
- You may not reach the next level pay grade: This is a crucial issue for salary negotiation; as your previous salary’s taken into account. And with a low salary, it would be not easy to reach the next level.
Whatever be the advantages and disadvantages, the bottom line is, it’s an alternative to layoff. If the pay cut is across the board, it should be acceptable, but if one employee is singled out its discrimination. Whatever the reasons, under the present circumstances, it may be the best possible option with nothing in hand. So, review the situation carefully. And even if you take a salary cut, act with commitment and don’t let the reduced pay affect your quality of work. With markets shuddering under the effects of the recession, both for white-collar and blue-collar jobs, pay cuts are increasingly becoming acceptable and don’t have a negative stigma. Remember, time heals at least some paycheck wounds. So, take your call, weighing the situation well.